Simply put, they’ve created a responsibility-based, rather than people-based view of their organization. The building block is a clear responsibility over a well defined domain which can then be mapped to a person currently owning this responsibility. On average, each employee owns about 3-4 AoRs in which they have full decision making authority. “Who owns X?” becomes a much simpler question to answer.

The challenge with this approach is scaling it. At 50 employees, navigating a list of 150-200 AoRs is manageable. At 200 employees, with 600-800 AoRs it quickly becomes unwieldy. Which means that you need to start grouping/clustering AORs, and you go back to the divisional vs. functional debate… Especially when you need more than one level of hierarchy, should you group them divisionally or functionally?

My answer: Both. Depending on use case, one or the other would make the most sense. As we operate within our orgs, not matter how they’re organized, we constantly switch our frame of thought between functional and divisional depending on the task at hand. A good tool should mirror that by having some sort of a toggle between a divisional and a functional view.

Most of the “Org Chart” tools that I know do not account for this “dual view” of the org. Do you know any that do?

As you can probably tell from its title, the context was Microsoft’s reorg from a divisional organization to a functional one, but that’s outside the point for this post.

I keep going back to this post every time we’re considering a reorg, asking myself whether this moves us closer to the divisional or functional pole of the spectrum (most companies, especially in lower tiers, are hybrids) and therefore, how we should mitigate the risk in the trade-off.

Massive, enterprise-scale companies, truly have the option of choosing one over the other. But smaller companies don’t. Most small to mid-size companies are organized functionally, since at that scale, it is clearly the more effective way to organize. But it still has its shortcomings.

As Ben suggests, accountability in functional organizations is less clear. It’s also more likely that despite the overall structure, some people will be holding more divisional responsibilities (Product Managers are a great example).

More on one approach for dealing with this challenge in the next post.

The gits: the traditional, hierarchical, command-and-control approach to management clearly doesn’t make a lot of sense in the modern work environment. But the allergic reaction of swinging the pendulum all the way to the other extreme and eliminating management altogether (a-la Valve Handbook) clearly doesn’t work either. Instead, Moskovitz proposes the following approach: aim to distribute decision-making authority as much as possible to the relevant domain experts. Management still plays two key roles:

Backstop for all decisions – filling in the whitespace where decision authority is unclear

Drive and guide employee’s personal growth through mentorship

What do you think: should the pendulum start swinging more in this direction? what’s still missing?

The gist is simple: walking a group through a set of materials is a total waste of everyone’s time. We all can read pretty well on our own thankyouverymuch. Therefore – share materials ahead of time so people can read them prior to the meeting and focus the group’s time together on driving clarity and removing any issues that stand in the way of getting to alignment on actionable next steps.

Coupled with Urban Airship‘s Meeting Rules, you’re way on your way to having productive meetings that are a good use of everyone’s time.

Though often portrayed a the typical evil corporation archetype, some of them are doing some pretty amazing and innovative work around operating organizations on a massive scale.

I recently heard Statoil‘s Bjarte Bogsnes give a wonderful talk at LKNA ’14 on how this 23,000-employee, publicly-traded Norwegian oil company is managing its budgeting process and business performance in general.

I was so impressed with the company, that I did some more digging around and uncovered this gem: